Q1 2021 Radiant Logistics Inc Earnings Call

On Crain, Radiant logistics, founder and CEO and Radiants, Chief Financial Officer, Todd Macomber will discuss financial results for the company's fourth fiscal quarter and 12 months ended June Thirtyth Twentytwenty. Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference call may include forward.

Looking statements within the meaning of the Securities Act of 933, and the Securities Exchange Act of 1934. The company has based these forward looking statements on its current expectations and projections about future events.

These forward looking statements are subject to known and unknown risks uncertainties and assumptions about the company that may cause the company's actual results or achievements to be materially different from the results or achievements expressed or implied by such forward looking statements. While it is impossible to identify all the factors that may cause the company's actual results.

Or achievements to differ materially from those set forth in our forward looking statements. Such factors include those that have in the past and may in the future be identified in the company's SEC filings and other public announcements, which are available on the radiant website at www dot radiance that delivers dot coms and.

Addition, past results are not necessarily an indication of future performance.

Now I'd like to pass the call over to Radiants founder and CEO von Crane, Sir the floor is yours.

Thanks Darren.

Good afternoon, everyone and thank you for joining in on today's call.

I'm very proud of the radio network and our collective response to the challenges presented by the COVID-19 pandemic.

Since late March we have been focusing on delivering against four key objectives into.

Ensuring the health and safety of our employees provide.

Providing supply chain continuity for our customers operating partners and carriers.

Protecting the economic security of our people to the greatest extent possible and taking steps necessary to mitigate the impacts of the slowing economy on our business.

Although the pandemic has had substantial negative impact on many of the industry verticals and customers that we serve.

We are proud to be playing an active role in the fight against COVID-19 deliver.

Delivering personal protective equipment, food and beverage consumer goods technology, and other central products to customers across North America and around the world.

Our work, particularly in support of the movement of Pp has helped us to achieve record results of $13.1 million in adjusted EBITDA.

On $275.5 million revenue for the quarter ended June 32020.

We are fortunate to have entered this economic downturn with very low leverage on our balance sheet.

In addition, we aggressively work to preserve our liquidity.

Tabling any acquisition efforts suspending our stock buyback program deferring discretionary technology investments, reducing our discretionary operating expenses and initiating a series of temporary workforce reductions.

On the basis of a 19 these proactive measures along with our work in supporting the central businesses has allowed us to continue to pay down our debt even during the brand image.

As of June 30, we had $34.8 million of cash on hand, and net debt of $17.1 million less than one half of one turn of our trailing 12 months EBITDA.

Giving us additional financial flexibility to navigate any further market weakness as well as the ability to pursue new acquisition opportunities into the future.

Although the overall demand for transportation services has been significantly impacted around the world.

We are seeing slow and steady improvement across many industry verticals that we serve.

And we are optimistic about the economy and its continued recovery.

As a result, we have begun to restore salaries of our employees.

Return many of our furloughed employees to work and will be forever grateful to our team of employees and operating partners, who have worked so resiliently to support our customers through this pandemic.

In the months ahead, we will continue to closely monitor how we in the economy are progressing and look forward to reengaging in acquisition and or our star our stock buyback activities as the opportunities present themselves.

With our diversity of customers and service offerings, the strength of our balance sheet, the scalability of our technology and the commitment of our teammates. We believe we are well positioned to emerge from the pandemic as a stronger more vibrant.

Yes.

With that I'll turn the call over to Todd Macomber, our CFO to walk us through our detailed financial results and then we'll open it up for QNX.

Thanks, Bob and good afternoon, everyone. Today, we will be discussing our financial results, including adjusted net income and adjusted EBITDA for the three and 12 months ended June Thirtyth 2020.

For the three months ended June Thirtyth 2020, we reported net income attributable to common stockholders of $4.665 million on $275.5 million of revenues or nine cents per basic and diluted fully diluted share, which included a charge of $1.7 million for change in country.

Into consideration.

For the three months ended June Thirtyth 2019, we reported net income attributable to common stockholders of $4.461 million on $204.6 million of revenues or nine cents per basic and fully diluted share. This represents an increase of approximately $204000 over the comparable prior.

Our year period or 4.6%.

For the three months ended June Thirtyth 2020, we reported adjusted net income attributable to common stockholders of $8.883 million.

For the three months ended June Thirtyth 2019, we reported adjusted net income attributable to common stockholders of $7.538 million.

This represents an increase of approximately $1.345 million or approximately 17.8%.

We reported adjusted EBITDA of $13 million $148000 for the three months ended June Thirtyth 2020, compared to adjusted EBITDA of $11.011 million for the three months ended June Thirtyth 2019. This represents an increase of approximately 2 million 103.

$7000 or approximately 19.4%.

Moving along to 12 month results.

For the 12 months ended June Thirtyth 2020, we reported net income attributable to common stockholders of $10.541 million on $855.2 million of revenues or 21 cents per basic and fully diluted share.

The 12 months ended June Thirtyth 2019, we reported net income attributable to common stockholders of $13.731 million, an $890.5 million of revenues or 28 cents per basic and 27 cents per fully diluted share.

This represents a decrease of approximately $3.190 million over the comparable prior year period or 23.2%.

The 12 months ended June Thirtyth 2020, we reported adjusted net income attributable to common stockholders of $25.632 million.

12 months ended June Thirtyth 2019, we reported adjusted net income attributable to common stockholders of $26.648 million.

This represents a decrease of approximately a million $16000 for approximately 3.8%.

We reported adjusted EBITDA of $38.259 million for the 12 months ended June Thirtyth 2020, compared to adjusted EBITDA of $40.760 million for the 12 months ended June Thirtyth 2019. This represents a decrease of approximately $2.501 million.

Or approximately 6.1%.

With that I will turn the call back over to our moderator today.

Facility in acuity from our callers.

Ladies and gentlemen, the floor is now open for questions. If you do have a question. Please press star one on your telephone keypad at this time, if you are using a speaker phone we asked a while posing your question pick up your handset to provide the best sound quality.

Again, ladies and gentlemen, please press star one on your telephone keypad at this time, if you'd like to ask a question or have a comment for our speakers.

And again, ladies and gentlemen, if you do have a question or comment you May press star one on your telephone keypad at this time again Thats star one on your telephone keypad. The QSR question.

We'll take our first question from John Godyn with Lake Street Capital. Please go ahead.

Hey, guys I. Appreciate you taking my questions I guess, just kind of big picture here is you will get business and maybe things are starting to kind of turn around.

Loads are there any verticals you are where you are seeing.

Maybe some increase strength or that you trades.

You know could help drive results going into 2021. Thanks.

Sure there are.

The number of categories right certainly some other categories that.

Have performed well recently.

Life Sciences.

Food and beverage CPG.

All of those have have proved very durable and.

And so we expect those to continue to perform.

Well in this market environment.

We did quite a bit obviously this last quarter and the.

Humanitarian aid category NPP it remains to be seen kind of what type of opportunities around the ultimate distribution of the vaccine might present themselves, but we're very bullish on life sciences, and what those opportunities might represent over the longer term.

At the same time in this.

Kind of increasingly tight market environment.

Some other segments of our business I'm thinking specifically of.

Clipper, our U.S. brokerage intermodal and truck brokerage operations out of Chicago.

I think we'll see some some good results coming out of that group.

In the quarters ahead.

Okay, cool and just slipping to the PV I guess could you help us kind of understand how those transactions you initially tape outs.

Maybe walk us through at a high level of margin profile.

That type of business looks like.

More traditional business. Thanks.

Sure.

I mean.

We can.

Can take lots of forms I guess for US we did a significant amount of international air charters choice.

Chartering aircraft.

And ultimately charters are relatively low margin business. So.

Thats why you see.

Kind of the.

The unusually high topline revenues and the unusually low gross margin percentage.

As that that spike spike in activity.

While certainly helped our gross margin dollars and that was something we were proud to be a part of if you look at look at on a gross margin percentage basis that would manifest itself as margin compression.

For the fourth quarter, but.

I guess precisely to your question for US It was a lot of the international Air charters moving.

Mass downs.

Face to face guards.

From manufacturing points in Asia inbound to various points across North America.

Okay and last one for me I know you touched on it a little bit, but as you kind of sit back and look at the landscape of potential acquisitions I am just kind of given the current environment has how you guys think about those changed at all or could there potentially be more opportunities out there.

Given the current environment.

Well I think it will be an interesting time, we're very again very fortunate to have kind of enter that entered this whole economic cycle and that's what we're going to call. It with very low leverage and based upon our recent results have been able to continue to pay down debt and accumulate cash on our balance sheet. So in terms of.

Durability.

And kind of coming through the proverbial eye of the storm I think we're in really.

Good position and so we have more financial flexibility than certainly some you read about who are having to really lever up their businesses. In this environment. So that may will put us in a good position to be perhaps more actionable than others as as opportunities present themselves.

At the same time, it will be an interesting dynamic because my my general expectation would be that any companys trailing 12 month earnings right now are either unusually high or unusually low and and so reaching some consensus around kind of normalized earnings power.

Our around which the Giro transaction I think that will be where a lot of the work is not just for us, but anybody trying to get deals done kind of in the rear view mirror of OCO that.

All right. Thank you guys very much congrats nice quarter.

All right. Thank you. Thank you.

As a reminder, ladies and gentlemen, if youd like to ask a question or have a comment you May press star one on your telephone keypad at this time again Thats star one to queue up for questions.

There appear to be no further questions at this time.

My apologies, we do have a question now from Alex brand with Wells Fargo. Please go ahead Sir.

Why didn't pay Durbin will EMEA and bonds.

Go ahead.

We're always happy to have you if I'm doing well how are you.

Good good so.

Just a little segue off that last question.

I think I'm not sell side or any more but I think this is probably the best free cash flow quarter, you've ever had.

So so it looks like you're you're headed towards a debt free balance sheet.

And I guess I guess I've thought.

What was the buyback program heading into this and sort of where it is the enthusiasm for that stand in light of balance.

Balance sheet cash flow and and weighing that against acquisition opportunities.

Sure at that.

Cod correct me, if I'm wrong, but I believe we were authorized to purchase up to 5 million shares and that I believe that program as authorized through the end of calendar 21, I think is the scope of the program.

And we had we had begun to get active in the stock buyback kind of heading into Covance. So I think we had spent $1 million in the quarter ended December and maybe a million and a half dollars in the quarter ended March before we kind of came to realize what was.

Going on and kind of press the pause on all of that so.

So its out there and we were kind of beginning to make good on on the buyback and ultimately the way I think we will still continue to look at things the same way, which is look at our overall liquidity look at the M&A pipeline think about financial flexibility target.

Leverage ratios and.

And kind of make a decision within that framework. So there is there is there is no not necessarily have a bright line at dollar sign blank, we will buy in at dollar side and why we won't it'll be more kind of evaluated in the context of kind of competing uses of the capital weather.

Whether it's an M&A opportunity or investing in.

Incremental sales resources to drive organic growth number.

A number of these things will come into play, but it but it will certainly remain you know.

A a very viable option for us as we think about how we deploy our capital.

Okay and then.

With respect to.

I think team present. This you had this kind of one time opportunity, but I think maybe there is a misunderstanding that this kind of goes away over 90 in.

And my my thought would be that it is more wind down than just goes away can can you give us.

At a high level talks about how project work can be offset by improving fundamentals and underlying trends you're seeing in the core business and maybe help us think about how that starting to look.

Sure I guess, let me I guess, let me start with a comment there.

It goes back to the diversity of our customer base and service offerings.

Because ultimately we do a lot of different things and ultimately they can counterbalance themselves in varying market cycles as well as.

We are seeing here.

Yes.

[music].

FEMA or other similar project work I think ultimately is the proverbial recurring nonrecurring type items. So while in this most recent quarter, we were very active in pp.

We've been active historically with FEMA and responding to hurricanes and typhoons and other.

Humanitarian initiatives.

And so.

We have a a good strong relationship with FEMA and others.

And we would hope to have an opportunity to can continue to support them when those opportunities present themselves. So.

No.

We certainly aren't.

It's fair to say that this the Covance pandemic was.

Hopefully, a one and a lifetime experience.

So we're we're certainly not.

Expecting to have a a similar.

Experience relative.

To them to the most recent quarter.

But back to this notion of recurring nonrecurring work will be here to support.

FEMA or and or others when the phone rings.

And unfortunately, there's always stuff going on out there in the world that will likely.

I have an opportunity to support.

Well. Thank you spent a long time since I was on a call like this bond. So thank you and by the way I think you guys deserve some real props for not only winning that counter cyclical business that helped you through this for doing a great job. So congrats on that.

Thank you.

And one for ladies and gentlemen, if youd like to ask a question or have a comment you May press star one on your telephone keypad at this time again Thats star one on your telephone keypad to queue up for questions.

Sir there appear to be no further questions at this time.

All right, let me close by saying that we remain very bullish on our prospects.

And the scalable non asset based platform that weve created at radiant.

Our unique multi brand strategy and consolidating agent based forwarding networks industry, leading technology platform and low leverage on our balance sheet puts us in a unique position to navigate these markets.

And position ourselves to emerge from this pandemic as a stronger competitor.

Ultimately the economy will recover as this happens we believe this will create an opportunity to support our customers and bringing their supply chains back online.

In the interim we will continue to work to keep our employees safe in the essential freight moving while giving our strategic operating partners the support they need.

At the same time, we remain patiently persistent in the pursuit of our vision to leverage our multi brand strategy and scalable back office infrastructure to bring our unique value proposition to the agent based forwarding community, which we believe over time will continue to deliver meaningful value for our shareholders, our operating partners and the end.

Customers that we serve.

Thanks for listening and your support of Radiant logistics.

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation you may disconnect. Your lines at this time and have a great day.

[music].